| A good tax shelter is hard to come by, | | | | payment goes toward interest, especially |
| but the perfect shelter may be right in | | | | when the loan is brand new. All the |
| front of your eyes. There are many | | | | interest paid on a home loan is tax |
| companies which are encouraging people | | | | deductible. Not only that but you can |
| to spend their hard earned money on | | | | own up to two homes and the interest |
| investments in tropical places where it | | | | payments on both are tax deductible. |
| will be kept safe and away from the IRS. | | | | This type of deduction reduces our |
| Yes, this type of tax shelter is | | | | taxable income and therefore reduces the |
| illegal and really aren't very efficient | | | | amount of taxes we have to pay each |
| in keeping your money away from the tax | | | | year. Additionally any money put out |
| man. However, most people do not | | | | for home improvements or home |
| realize that that the government allows | | | | improvement loans can also be tax |
| us to use our homes as a way of | | | | deductible. These are calculated |
| collecting a tax deductions, credits, | | | | differently then mortgage taxes. Only |
| and benefits. These benefits were | | | | capital investments can be used as tax |
| established to offset the costs of | | | | deductions. Capital investments are |
| owning a house. It is said that home | | | | those which increase the value of the |
| owners are the basis to all communities | | | | home. For example adding new room or |
| and therefore the economy as a whole. | | | | another bathroom, anything that prolongs |
| It is the homeowner who purchases | | | | roof life, or even adapting the home for |
| services and goods which in turn supply | | | | the elderly or people with disabilities. |
| jobs to the people of community which | | | | Married couples are allows to have up to |
| eventually leads to funding state and | | | | $500,000 profit from the sale of home |
| local taxes. The deductions help keep | | | | which was the primary residence for over |
| the real estate market full of new | | | | 5 years. This profit is tax free. |
| buyers which helps the prices of houses | | | | Single people are allowed $250,000 |
| increase over time. As the public needs | | | | profit which is also tax free. Houses |
| more and more houses and the supply of | | | | are great shelters and this is one of |
| available homes gets smaller, it causes | | | | the reasons that home based businesses |
| the market price of houses to increase. | | | | are so popular and successful. When |
| This creates equity and real wealth in | | | | individuals use even part of their home |
| the house and therefore a sound | | | | for business purposes they are able to |
| investment which can be passed down from | | | | write off a percentage of those costs |
| generation to generation. Owning your | | | | associated with whatever part of your |
| own home is not just the American dream | | | | house you are using for a business. |
| it can work great as a way to store and | | | | This may include utility bills, |
| built personal wealth. | | | | insurance, repair cost, and |
| Most of the money paid for mortgage | | | | depreciation. |